T-bill rates surge ahead of inflation data release

Bureau of the Treasury

Treasury bill rates surged on Monday ahead of the release of June inflation data later this week.

The Bureau of the Treasury (BTr) said it was able to borrow its targeted P20 billion from T-bills with total bids reaching P43 billion, exceeding the original size of the issuance by 2.2 times.

READ: Gov’t raises P15 billion from T-bill auction

The 91-day T-bill fetched an average rate of 5.686 percent, more expensive than the 5.666 percent from last week’s auction. The yield on the 182-day debt notes went up to 5.959 percent from 5.930 percent, while the rate for the 364-day paper rose to 6.050 percent from 6.031 percent, previously.

‘Steady to higher’

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said yields were higher amid expectations of “steady to higher” inflation fueled by the continued weakening of the peso and the effects of El Niño climate phenomenon.

The local currency closed at 58.65 per dollar yesterday, weakening from its 58.61 finish on Friday, still at 20-month highs.

Borrowing programThe Philippine Statistics Authority, meanwhile, is set to release the June inflation rate on July 5.

The Marcos administration wants to raise P260 billion from T-bills and P370 billion via Treasury bonds in the third quarter. In July, the BTr plans to borrow a total of P215 billion, of which P100 billion is from T-bills and P115 billion from T-bonds.

The government ramped up its borrowing program by 7.7 percent to P630 billion for the third quarter, higher from the previous P585-billion program, as it remained committed to increasing its investments in infrastructure projects. INQ